Wednesday, February 24, 2010

Rental Market: What a difference a few months makes! Despite seasonal factors, which usually see inventory levels climb, I have seen the opposite this winter. One reason is that over the past several years there has been a trend where landlords have been stacking their vacancies into the April-October period by writing leases longer than 12 months in order for them to end during the active time of year. However, I think lower rents and incentives have also helped New York retain more people than would be ordinary in a hot market. The bad news for renters is, it appears that the party is just about over. Sure, you can still get wild incentives in the Financial District and Far Midtown West, but established neighborhoods are starting to see better pricing power. I have encountered numerous prospective renters of late whose perceptions of a hyper-renter's market have been shattered. The fact is, inventory is actually down significantly over the past several months and landlords are slowly and cautiously wising up to the fact that they no longer have to give it away. Is there a huge rebound in pricing coming up? I tend to doubt it given the continued weak jobs picture and the surge of inventory that we will see in the spring, but it does look like the bottom has been reached.

Sales Market: It is night and day compared to 2009. It looks like we are setting up for a period where the perception gets ahead of the reality. As I have mentioned in the past, after a nuclear winter of sorts last year, things started to pick up last Spring and accelerate into the summer and fall. Most of the activity was concentrated to the under $1 Million market. The market has been changing this winter. First, the activity has begun to trickle up to the $2 Mil.-$4 Mil. segment. Second, while everyone is expecting great discounts (and many are getting them), the volume of prospects in the market and attending open houses has picked up significantly. There have been sporadic bidding wars, but at the same time, these are at the new normal (lower) prices, and most have kept their heads and budgets in check. It looks like a fairly stable market, but everyone should watch out for a marked increase in positive perceptions of the market near term. The reason is simple. Last year was so bad that this year's numbers are going to look explosive. It would not surprise me to see year over year increases in 1st quarter sales that seem amazing. I am sure that there are going to be some very dramatic and positive headlines, but remember, these are against numbers when the earth stood still! Nevertheless, perceptions can drive a market and these reports could result in an increase in pricing power in the short term. If the jobs picture and overall economy improves during that period (big ifs), that increase will stick. The best advice in this market bears resemblance to an old OTB commercial: "bet with your head, not over it."

Thursday, February 18, 2010

This one has been on my mind for a while. I have spotted a very unusual rental up on East 59th Street, or should I say behind 59th Street. It is one of those rare offerings, your own detached carriage house. It is 3 stories, has 3 bedrooms, 2.5 baths, a 300sf patio and small roof deck. Each level is approximately 600 square feet with a living room, kitchen and and half bath on the first level, two bedrooms and a full bath on the 2nd level, and a sky lit 600sf master suite with full bath on the 3rd level. The entire home is bright with little obstruction to the south and tons of windows facing south and west. The owner is paying the fee, and considering the time on the market, which has been a few months at this point you can assume that the price is negotiable. The home does have its negatives: while it is relatively quiet and off the street (behind a 4 story walk-up), that street is 59th Street, east of Third Avenue, and there is no shortage of traffic. Also, despite having the requisite washer/dryer and 2.5 baths, the finishes are dated. But, where else can you find a stand alone home in Midtown for this kind of price? More Info: $5800: 50's East Private Carriage House.

I just can't give enough credit to Extell Development over the past few years. Here is yet another shining example, 535 West End Avenue. Not only has this attempt at "21st Century Prewar" hit the nail on the head as it seamlessly fits in to its environs, only Extell can pull of an average of $2600 per square foot in a weak market. A true achievement in many ways. Hey, it's not too late to grab a piece of the action for yourself, 10 of the 22 half and full floor apartments remain, starting at a mere $8.5 Million.

Tuesday, February 16, 2010

It has begun, finally! The public/private venture of RFK (Robert K. Futterman) at 57th Street and Second Avenue is underway in earnest! I took this shot a few days back and the former elementary school at the site is quickly vanishing. What goes in it's place? Two new schools, retail including Whole Foods, and eventually a 59 story residential tower (nothing definitive on condo vs. rental and in fact if and when that part will ever happen- that's phase 2). One thing we do know is that the elementary school, P.S. 59 is scheduled to open in September 2012. We also know that the High School of Art and Design will occupy the space as well. The benefit here is that the elementary school will triple in size, the high school will grow 40% and the building on East 63rd Street where P.S. 59 is now squatting will become P.S. 267 to alleviate crowding in other Upper East Side schools when the new P.S. 59 is finished. Got all that? As for Whole Foods? It looks pretty solid at this point, at least if you take the 250 East 57th Street website at face value.

Mo Vaughn, former New York Met, Boston Red Sock, and AL MVP, has long been known for his slugging, but now he has some very big hits off the baseball field too. In fact, Mo Vaughn and his Omni Associates has become a heavyweight in the affordable housing market, now controlling nearly 5000 units and vying for big deals, even as big as Stuytown, it is claimed. Whether you believe that or not, his is an inspirational do-gooder tale, as told in this week's Crain's New York.

Thursday, February 11, 2010

Sorry for the lack of content over the past week. Aside from moving to a higher floor at the splendid City Spaces Suites, in the process, I picked up some nasty malware, a program called "Your PC Protector", which I have been battling in some form or another for the past five days. I have managed to rid my computer of that nasty bug, but am having a residual problem with a bug that causes my browser to re-direct every time I try to access Google, or anything Google related.I have some pent up content and will be posting it over the next couple of days. Stay tuned, and apologies for the temporary down time.

Time and time again, I have fixated on a new development project, and the finished product ends up a major disappointment. For that reason, I was beyond delighted to see how the nearly-finished product at 10-17 Jackson has turned out. And, I am happy to report, Times Square Construction & Development has decided to forge ahead as a condominium!

I was reminded again and again as I toured the site today that, as a Times Square rep put it, "we are a construction company first, and a development company second". This is a project where quality is apparent throughout, and just as significantly, the project was built with pride and acute attention to detail. For starters, the building could have been built 11 stories as-of-right, but the builder instead to go 8 stories plus roof so the ceiling heights in each apartment would measure at 11'+ plus for each. The effect is a spacious feel and an incredible light and views in every unit. Also impressive is that the builder decided to go with 8" poured concrete floors topped with 3/4 sub flooring and 3/4 walnut floors- no skimping here. I was worried about a possible rumble from the 7 train just yards away, but after an hour in the building not a peep- this building is clearly solid as a rock. It is extremely quiet as well. The builder imported sound resisting double paned windows from Europe, and they leave the interiors pin drop quiet.

The apartments are well appointed with white lacquer cabinets, granite counters, Liebherr fridges (other kitchen appliances Jenn Air), full sized washer and dryer in each unit, and a modern bath with soaking tub. There are a couple of unique features, aside from the brilliant windows that run largely from floor to ceiling. In many apartments, especially the 1 bedrooms, there is a translucent glass wall that can be rolled back to open to the living room. An interesting option for those who would like to open things up. But perhaps the most interesting feature is that many of the bathrooms have floor to ceiling, or at least tub to ceiling, windows that would allow you to enjoy the view while neighbors are enjoying a view of you. Sort of like The Standard Hotel meets LIC. Speaking of views, there is no shortage in this building. From the 2nd floor you see a significant portion of the Chrysler Building, but once you hit the 4th floor, it is wide open skyline in the west facing apartments and open river, creek, and Brooklyn views on the east side of the building. Studio V Architects deserves major kudos here. The layout of the building was brilliant. Given its triangular lot on Vernon and Jackson, it could have gotten tricky, but somehow Studio V minimized the angles in the apartments and you never feel like you are stuck in a 3 sided box. The other point of brilliance was staggering the north side of the building with terraces (nearly every apartment in the building has one) so that apartments on the northeast portion of the building still enjoy exceptional west views of the skyline. Other exception touches include a lobby with 24' ceiling and penthouse with ceilings that peak at 22'.

The bottom line is that Times Square looks like it has a home run on its hands here. Nearly every apartment has light, views, and a terrace. The construction quality is exceptional and solid. And those 11' ceiling, fantastic. Everything from here will ride on pricing. While a schedule A has already passed muster with the AG's office, some tweaks may still be made. The price talk I am hearing seems reasonable. The TCO is expected in the next couple of weeks and sales will likely start within 8 weeks. Can't wait!

Monday, February 1, 2010

Macklowe Exits The Residential Business. It's been a long, ugly couple of years for Harry Macklowe whose ill fated dealings with Sam Zell a couple of years ago has cost him the majority of his empire. Latest to go, three residential towers: The River Tower (pictured left) on 54th Street and First Avenue, 777 Sixth Avenue, and The Longacre House at 50th and Eighth Avenue. The deal for the 910 total units included in the deal is said to total around $450 Million. Ironically, the sale was to Zell's Equity Residential. In a related story, Macklowe has sold off his interest in the prized Drake Hotel site on 56th and Park to CIM Group for $305 Million. it is unclear at this point if Macklowe will retain any interest in the Park Avenue site.Three Macklowe Towers Snapped Up By Sam Zell (Crain's)

What's that rising at 32nd and Sixth Avenue next to Jack's 99 Cent Store? Why it is Tower 111, a 47 story residential rental with 31,000 square feet of retail on the first 2 floors and a few offices. It is being built by Atlantic Realty Development and designed by Costas Kondylis. While I might ordinarily criticize glass wall construction, maybe I'll give this a recession waiver. After all, it's just good to see something going up these days! And how about that lot line on the south side (left side in the pics) of the building? Looks like a lucky few were spared and will continue to enjoy the light of day. Finally, is this glass extra shiny or extra reflective. From a few of the pictures I took it seems as though it is so reflective that it virtually vanishes. An invisible building? That would be a concept!

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About Me

Associate broker for Halstead Property. First licensed in 1991. Dedicated to providing a level of service, knowledge, and professionalism which exceeds all in the industry. Moved to New York at age 7 (over 40 years ago). I love the old New York and I am an infomaniac when it comes to new development in the city. I have a wonderful wife, 3 gorgeous girls, and live on the Upper East Side.
E Mail any time: andrew@afinecompany.com or for real estate matters afine@Halstead.com or just check my real estate page: http://andrewfine.halsteadagent.com/